A cool idea on the move

The telecommunications industry, once quiet and staid, has acquired a frenzied nature in recent years. Long-standing network operators of every sort are in the throes of competition brought on by deregulation or market forces. Also, new carriers are rapidly emerging in every segment of the industry.

This chaotic environment has had various effects on how carriers do business and how they organize and operate themselves.

For instance, network operators that have been around for years have been forced to downsize to create more cost-competitive organizations. At the same time, network management process centralization and continuing physical network expansion have forced carriers to expand some offices or occupy new space.

New carriers have had a similar experience. Early debt, small budgets and low personnel requirements found them in small offices early on. However, many have expanded quickly-so fast, in fact, that they have had to move into new facilities that may have not been ready yet. When they have finally gotten comfortable in these new digs, they often have had to bug out for new offices again.

Vendors also have not been able to escape this experience. The success of new technologies, combined with rampant vendor acquisition and increasing globalization, has forced them to rapidly expand manufacturing facilities.

For all these companies, the pressures of operating in a chaotic environment-the constant movement and disheveled atmosphere-have raised new requirements for everyday office and factory equipment.

This is especially true for environmental systems. Air conditioning and ventilation systems are necessary for for reasons of employee comfort and also because high-powered electronic equipment needs sufficient cooling to maintain stabile operation and keep from overheating.

MovinCool, based in Long Beach, Calif., has responded to this need and is serving both carriers and manufacturers. The company makes and sells portable air conditioning systems that are a strong fit for current telecom environments.

The company displayed its OfficePro 12 and Classic Plus 14 units at Supercomm in June, and both units became available last month. MovinCool offers several portable systems, ranging from 10,000 to 60,000 BTU/hour of cooling capacity and from low-power to high-power consumption.

To MovinCool, today's telecom environments are breeding grounds for "spot-cooling" applications, in which a portable air conditioning system is a temporary solution that is needed quickly and must operate reliably, says Karen Galas, manager of the MovinCool division of Denso Sales California.

Denso is a Japanese company founded in 1971 and partly owned by Toyota. It pioneered the idea of portable cooling systems. The systems were originally designed by Denso to meet its own factory needs and were used extensively in Japan's automotive factories. Since then, MovinCool has redesigned the systems to address the needs of offices, computer rooms and other areas dense with electronics, says Galas.

"Network operators are a fairly new target for us, but they really need these units," she says. This is particularly true of competitive local exchange carriers and Internet service providers that are quickly adding equipment to operations centers and computer rooms, she adds.

In addition to these applications, which are likely to be temporary until carriers deploy more permanent central air conditioning systems, portable spot-cooling solutions also can serve as backups to main systems. They can be moved into computer rooms when heat loads pass a certain temperature threshold, or they can be part of an all-out disaster recovery strategy.

Vendors such as Microsoft and Hewlett-Packard have used them in backup capacities.

They also can be used on weekends or during off hours when main air conditioning systems are turned down. Programmable clock features allow the units to automatically turn on and shut off at specific times.

Some might think these temporary uses make it hard for portable systems to find a long-term position in the telecom industry. However, the systems last for decades, providing a strong return on investment, Galas says.

In such a wild growth industry, when portable systems are inevitably moved out in favor of permanent systems, there will always be another application somewhere that will need attention.

The wave of power-related mergers and acquisitions continued late last month as Northern Telecom forged an agreement to sell its Montreal-based Advanced Power Systems business to U.K.-based Astec.

The acquisition follows two worldwide trends in the power equipment industry. First, several large network equipment manufacturers have begun to sell off their old power equipment businesses or have begun outsourcing power-related pieces of their contracts to devoted power equipment vendors.

Second, in efforts to broaden their product lines to better support their network manufacturer customers, power vendors have begun to expand through acquisitions and partnerships.

Nortel opted to put its power group on the block so it could better focus on its core infrastructure business, according to Wayne Baxter, vice president and general manager of consumer, power and component products at Nortel. The Toronto-based vendor giant plans to develop a long-term agreement with Astec to satisfy all its power equipment needs, he said.

Meanwhile, London-based Astec saw the acquisition as an opportunity to enhance its ability to compete globally. As in the industry's other recent power-related acquisitions, the company also sought to broaden its existing product line to capture new business, said Astec's CEO Howard Lance.

Astec currently manufactures electronic power conversion products and components for several different markets.

Under the terms acquisition agreement, Astec will buy the assets of the Montreal headquarters and other offices located in the U.S., Mexico, the U.K., France, Singapore and Malaysia. The advanced power division's product lines consist of equipment such as PC board level components, DC-to-DC converters, embedded and stand-alone energy systems, and all related support services.

Astec also is offering continued employment to Nortel's 1600 advanced power employees worldwide.